Italy is a country in Europe bordered by France, Switzerland, Austria, Slovenia, and the enclaved states of Vatican City and San Marino. The country consists of a peninsula delimited by the Alps, as well as several islands surrounding it.

Italy is considered one of the world's most culturally and economically advanced countries in the world, ranking very highly in life expectancy, quality of life, healthcare, and education.

Types of Contracts

• Indefinite
• Fixed term - max 12 months

There are no restrictions on part-time contracts, but the employee must work a minimum of 16 hours per week.

Job Title Restrictions

No C-level titles (CEO/CFO, etc.) with the Employer of Record (EOR) employment model.

Working Hours

In Italy, the standard working hours are 40 hours a week and is typically spread over five days.

Employees who work overtime will be paid the following rates:

• 41 to 48 hours per week: an additional 15%
• 49 or more hours per week: an additional 20%
• Public holidays or Sundays: an additional 30%
• Night work (from 10pm): an additional 50%

Minimum Wage

There is no mandatory national minimum wage in Italy that applies to all workers. Instead, the minimum wage is set by collective bargaining agreements by sectors, in combination with employment laws.

Minimum wage, therefore, varies by industry, location and level of experience. For more information on job title classifications, see the government website here.

Probation Period

Probation periods in Italy are typically 3 months, with a maximum duration of 6 months.

Medical Examination

Employees in Italy must get a pre-employment medical check and certificate from a doctor before starting work, which will be reimbursed by the employer. For office-based workers, this is normally just an eye test.

Additionally, employees must get Health and Safety training on a regular basis, which should be organized and paid for by the employer.

13th/14th Salary

In Italy, workers are typically entitled to a 13th salary, usually paid in December. In addition to this, salaried workers are entitled to a 14th salary, which is usually paid in June.

Taxes & Local Employment Costs

Employee Taxes

Employees in Italy pay income tax according to the following tax bands of taxable income:

• Up to EUR 15,000 = 23%
• EUR 15,001 to EUR 28,000= 25%
• EUR 28,001 to EUR 50,000= 35%
• Above EUR 50,001 = 43%

Employees must also make social security contributions at the following rate: 9%

Employer Taxes & Contributions

Employers in Italy must make the following contributions in addition to the employee’s gross salary:

• Social Security Contributions: 30.5% to 32% of gross salary (depending on the type of contract)
• Accident Insurance: 1% of gross salary
• Mandatory Severance (TFR): 7.41% of gross salary

Employers must also make contributions to:

• Mandatory Private Health Insurance: approximately EUR 30 per month
• Travel Insurance: approximately EUR 15 per month
• Health and Safety Training & Medical Check: approximately EUR 15 per month

Annual Leave

Employees are entitled to a minimum of 20 days paid leave per year. However, most Collective Bargaining Agreements (CBA) include a minimum of 22 days.

Additionally, it is very common for CBAs to entitle the employees to an additional number of Paid Time Off (PTO) hours per year, with the following as a common standard based on length of service:

• Up to 2 years: 32 hours
• 3 to 4 years: 64 hours
• 4 years and above: 104 hours

Sick Leave

Employees are entitled to 180 days of paid sick leave per year.

Employees on a permanent or fixed-term contract typically receive 100% of their salary (paid by the employer) for the first 3 days of sick leave. Additionally, they are also paid for the first 2 instances of sickness absence in a year.

Following this, the employee is entitled to a reduction in pay to the following amounts:

• 3rd instance: 66%
• 4th instance: 50%

Maternity Leave

Female employees in Italy are entitled to a minimum of 5 months of paid maternity leave, at 100% of their salary.

2 months of the maternity leave must be taken prior to childbirth, and the remaining 3 months must be taken afterwards.

Paternity Leave

Male employees are given 10 days of paid paternity leave which can be taken anytime within 5 months of the child's birth.

Additional Parental Leave

Employees who are parents or legal guardians of children under the age of 12 are entitled to up to 6 months of paid parental leave. This leave can be taken in full or in part, and can be shared by both parents.

• 1st month: 80%, paid by state
• 2nd-6th month: 30%, paid by state

This leave can be taken anytime up to the time the child turns 12.

Public Holidays

There are 13 national holidays in Italy that are paid days off for employees:

• January 1, 2023 - New Year's Day (Capodanno)
• January 6, 2023 - La Befana (Epifania)
• April 09, 2023 - Easter (Pasqua)
• April 10, 2023 - Easter Monday (Pasquetta)
• April 25, 2023 - Liberation Day (Festa della Liberazione)
• May 1, 2023 - Labor Day (La Festa del Lavoro)
• June 2, 2023 - Republic Day (Festa della Repubblica)
• June 12, 2023 - Feast of Corpus Christi (Festa del Corpus Domini)
• August 15, 2023 - Assumption Day (Ferragosto)
• November 1, 2023 - All Saints' Day (Tutti i Santi)
• December 8, 2023 - Immaculate Conception Day (Immacolata Concezione)
• December 25, 2023 - Christmas Day (Natale)
• December 26, 2023 - St. Stephen's Day (Santo Stefano)

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Benefits

Summary

Employers in Italy can typically offer the following benefits:

• Private Pension Contributions
• Tax-Free Meal Vouchers
• Fringe benefits such as childcare or other allowances, up to a limit of EUR 3000. Please note that this reduces to EUR 250 in 2024.

Notice Period

The minimum notice period depends on the length of service and employment seniority level. Notices can range from 30 to 180 days.

Payment in lieu of notice is possible. Employers can choose to pay an employee the salary for the months they would have worked notice for, and the relationship ends with no notice period.

Duration probation, employment contracts may be terminated with no notice or severance pay.

Statutory Payments

Severance pay comes from the TFR severance fund that employers pay into each month. It’s calculated according to the year’s overall salary divided by 13.5, plus 1.50% for each year of work plus accounting for inflation.

At minimum, employees terminated without cause would be entitled to 3 months of severance, though in practice this can range from 3 to 36 months, depending on the nature of the termination.

Employees in Italy are entitled to a 13th month bonus equal to 1 month of salary, usually paid out in December. Some employers also choose to pay a 14th month salary in June. Italy has their own "lavoratori impatriati" tax scheme, which is a program that offers tax incentives to qualified individuals to encourage the movement of "human capital" to Italy.